Falcon Oil starts production testing at Shenandoah South 1H

Falcon Oil announced the start of the 30-day initial production (IP30) testing at the Shenandoah South 1H (SS1H) well in EP117 on Monday.

The AIM-traded firm said the operation was being carried out by Falcon Oil Australia’s joint venture partner Tamboran B2.

After the successful completion of the ten-stage stimulation programme in December and the installation of production tubing, the SS1H well underwent a three-week shut-in period for soak purposes.

That period allowed for the absorption of stimulation fluid by the shale, enhancing the formation's relative permeability to gas for future production performance.

The company said the SS1H well was successfully reopened on 25 January.

It said the IP30 test, which had now started, aimed to provide proof of commercial flow rates.

Falcon estimated the rate to be 1.5 million cubic feet per day over the 500-metre horizontal section, or three million cubic feet per day when normalised over 1,000 metres.

The results of the test were expected to be available by the end of February.

If the results demonstrated the expected flow rates, it would pave the way for the joint venture to move forward with the sanctioning of the proposed 40 million cubic feet per day pilot project at Shenandoah South in the first half of 2024.

“We look forward to this next phase of operations with the initial production testing of the SS1H well in the Beetaloo and will continue to update the market as results become available,” said chief executive officer Philip O’Quigley.

At 1545 GMT, shares in Falcon Oil & Gas were down 0.97% at 10.2p.

Reporting by Josh White for Sharecast.com.